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The Long-Run Effects of California's Paid Family Leave Act on Women's Careers and Childbearing: New Evidence from a Regression Discontinuity Design and US Tax Data

Author

Listed:
  • Martha Bailey
  • Tanya Byker
  • Elena Patel
  • Shanthi Ramnath

Abstract

We use administrative tax data to analyze the cumulative, long-run effects of California's 2004 Paid Family Leave Act (CPFL) on women's employment, earnings, and childbearing. A regression-discontinuity design exploits the sharp increase in the weeks of paid leave available under the law. We find no evidence that CPFL increased employment, boosted earnings, or encouraged childbearing, suggesting that CPFL had little effect on the gender pay gap or child penalty. For first-time mothers, we find that CPFL reduced employment and earnings a decade after they gave birth.

Suggested Citation

  • Martha Bailey & Tanya Byker & Elena Patel & Shanthi Ramnath, 2025. "The Long-Run Effects of California's Paid Family Leave Act on Women's Careers and Childbearing: New Evidence from a Regression Discontinuity Design and US Tax Data," American Economic Journal: Economic Policy, American Economic Association, vol. 17(1), pages 401-431, February.
    • Handle: RePEc:aea:aejpol:v:17:y:2025:i:1:p:401-31
    DOI: 10.1257/pol.20200277
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    Cited by:

    1. Glogowsky, Ulrich & Hansen, Emanuel & Sachs, Dominik & Lüthen, Holger, 2025. "The evolution of child-related gender inequality in Germany and the role of family policies, 1960–2018," European Economic Review, Elsevier, vol. 175(C).
    2. Elira Kuka & Na'ama Shenhav, 2024. "Long-Run Effects of Incentivizing Work after Childbirth," American Economic Review, American Economic Association, vol. 114(6), pages 1692-1722, June.
    3. Benjamin Hansen & Drew McNichols, 2020. "Information and the Persistence of the Gender Wage Gap: Early Evidence from California's Salary History Ban," NBER Working Papers 27054, National Bureau of Economic Research, Inc.
    4. Jiawen Liu & Xin Liu, 2026. "Spillover of Female Labor Protection: Evidence from China," Journal of Labor Research, Springer, vol. 47(1), pages 1-34, March.
    5. Marie Hyland & Simeon Djankov & Pinelopi Koujianou Goldberg, 2020. "Gendered Laws and Women in the Workforce," American Economic Review: Insights, American Economic Association, vol. 2(4), pages 475-490, December.
    6. Joanne Haddad & Lamis Kattan, 2024. "Female-Specific Labor Regulation and Employment: Historical Evidence from the United States," CESifo Working Paper Series 11546, CESifo.
    7. Maclean, J. Catherine & Pichler, Stefan & Ziebarth, Nicolas R., 2020. "Mandated Sick Pay: Coverage, Utilization, and Welfare Effects," IZA Discussion Papers 13132, IZA Network @ LISER.
    8. Rita Ginja & Arizo Karimi & Pengpeng Xiao, 2023. "Employer Responses to Family Leave Programs," American Economic Journal: Applied Economics, American Economic Association, vol. 15(1), pages 107-135, January.
    9. Johanna Catherine Maclean & Stefan Pichler & Nicolas R Ziebarth, 2025. "Mandated Sick Pay: Coverage, Utilization, and Crowding-in," Journal of the European Economic Association, European Economic Association, vol. 23(5), pages 1868-1907.
    10. Canaan, Serena & Lassen, Anne Sophie & Rosenbaum, Philip & Steingrimsdottir, Herdis, 2022. "Maternity Leave and Paternity Leave: Evidence on the Economic Impact of Legislative Changes in High Income Countries," IZA Discussion Papers 15129, IZA Network @ LISER.
    11. Timpe, Brenden, 2024. "The labor market impacts of America’s first paid maternity leave policy," Journal of Public Economics, Elsevier, vol. 231(C).
    12. Fariha Kamal & Asha Sundaram & Cristina J. Tello-Trillo, 2020. "Family-Leave Mandates and Female Labor at U.S. Firms: Evidence from a Trade Shock," Working Papers 20-25, Center for Economic Studies, U.S. Census Bureau.
    13. Henrik Kleven & Camille Landais & Johanna Posch & Andreas Steinhauer & Josef Zweimüller, 2024. "Do Family Policies Reduce Gender Inequality? Evidence from 60 Years of Policy Experimentation," American Economic Journal: Economic Policy, American Economic Association, vol. 16(2), pages 110-149, May.
    14. Patricia Cortés & Jessica Pan, 2023. "Children and the Remaining Gender Gaps in the Labor Market," Journal of Economic Literature, American Economic Association, vol. 61(4), pages 1359-1409, December.

    More about this item

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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